Insider Trading: Why NHL extended isolation period to April 15

TSN Hockey Insiders Darren Dreger, Pierre LeBrun and Bob McKenzie virtually joined host James Duthie to discuss why the NHL extended its isolation period, what could happen to signing bonuses come July 1 and whether or not there’s hope this current stoppage can bring long-term labour peace on the other side.

TSN.ca Staff

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TSN Hockey Insiders Darren Dreger, Pierre LeBrun and Bob McKenzie virtually joined host James Duthie to discuss why the NHL extended its isolation period, what could happen to signing bonuses come July 1 and whether or not there’s hope this current stoppage can bring long-term labour peace on the other side.

Why did the NHL extend player isolation?

As the COVID-19 situation continues to develop, what does today’s news mean for the potential resumption of hockey?

Dreger: Well it’s all about the local isolation guidelines that are established by the local authorities. In fact, lawfully, the National Hockey League can’t go into the NHL facilities until those local authorities lift the ban. If you want to use the Washington Capitals as an example, Arlington, Va., has put a ban on all gatherings in that area until June 10. So this extension, April 15, might go well beyond April 15.

What’s the latest with Barabanov?

The Toronto Maple Leafs are eyeing Russian forward Alexander Barabanov. Where do things stand as of now?

Dreger: He’s a 5-foot-10, 195-pound forward. He’s got decent numbers in the KHL. Over the course of this year, there’s been as many as 20 NHL clubs that have inquired. The Toronto Maple Leafs and the Arizona Coyotes believe to be the frontrunners. I believe that Kyle Dubas will meet Barabanov’s representation, Dan Milstein, later this week. The interview process did start earlier today.

What would NHL centralization look like?

If the league is forced to cluster teams and potentially play games in less-affected areas without fans in the stands – similar to a method being tossed around in NBA circles – what would happen?

LeBrun: Yeah, that’s been a discussion in the National Hockey League has also had behind the scenes. Certainly, I should stress, not the preferred route for the NHL to point out the obvious but it’s something they have discussed. What I’m told is, for a 16-team playoff, that they’re looking at four separate centralized cities that they would start the playoffs in. Now, because of all the different playoff formats that they’re talking about, it could be more than four cities if it’s a 20-team playoff or a 24-team playoff. All those formats that we’ve speculated but yeah, it’s on the card it’s just that it’s not what they hope to do if all goes their way.

Revenue update

We have no idea what hockey revenues will look like this year or the next year, but what were they like last year?

McKenzie: For the 2018-19 season, the National Hockey League and the National Hockey League Players' Association in the last number of days here have finally agreed on what the final hockey related revenue number was for that season that was completed. And the good news for the players I guess is they get a little bit of their escrow back. They paid almost 13 per cent in escrow for the 2018-19 season and in fact after they’ve done the reconciliation here, it should be just a shade under 10 per cent. So the players are going to be getting back a little over three per cent of the face value of their contracts from the 2018-19 season. Maybe better news for the owners, they get close to 10 per cent coming back to them and those payments are expected to be made here in the next couple of weeks. The official sign-off still has to happen in the next day or two but by mid-April some money going into the pockets of both the NHL owners and the players.

What happens to signing bonuses?

Amid all the economic uncertainty, what happens to the near $450 million in signing bonus money owed to players this summer?

Dreger: Traditionally, July 1 as we know symbolizes the start of the new season. And it’s starting to look obvious that at this point there will be a pushback to the season. So it’s been a red flag by the National Hockey League, and you’re talking about enormous money here. Almost a half billion dollars in signing bonuses that would be scheduled to be paid out July 1 and if you look at the top five teams, the Toronto Maple Leafs are head and shoulders above everyone else in the league. Toronto is scheduled to pay out just over $60 million followed by San Jose at over $38 million, while the New York Rangers, Tampa Bay and Dallas are in the top five. But if there is a pushback, then July 1 maybe becomes September 1 as a starting point to the new season. And that money would be deferred to that point and you look at where the Canadian teams factor in on all of this. Again, Toronto at the top of the food chain with Auston Matthews topping the league at a signing bonus owed $15.2 million. And then you look at the bottom and there’s seven Canadian teams in contention and you get the Winnipeg Jets, who perhaps managed their books wisely with zero signing bonus money scheduled to go out at any point in the near future.

Could long-term labour peace be a possibility?

It’s hard to see just about any positives right now, but could this whole situation have some benefits down the road when it comes to avoiding a work stoppage?

LeBrun: Certainly that’s what everyone hopes and it’s interesting. Donald Fehr last week when I chatted with him, a little hint from him. He said listen, he hopes that’s the case in terms of a positive frame of mind for when CBA talks resume and what he said is sometimes when you go through adversity with the other side there are bonds that suddenly form. It was an interesting comment from Don Fehr, who we know went toe-to-toe with Gary Bettman in the 2012 lockout. And the conversations that I’ve had with player agents and team executives around the National Hockey League over the last week, that’s the growing sentiment is that instead of just focusing on some transition rules that’ll get both sides over the hump over the next 12 months in terms of the salary cap, escrow, July 1, all these things that we just talked about. Is there a bigger picture solution? Could there be a long-term CBA extension? Some long-standing ideas that bring stability into what will be a very difficult situation for the NHL business. Who knows what the revenues look like on the other side of all this through this COVID-19 crisis? So I know it’s something that even at the PA and the league that they’re starting to talk about internally. Not with each other, mind you, CBA talks are on hold, but hopefully that could be the solution out of all of this is a way for both sides to find long-term stability.